Manufacturers are perpetually striving to prevent and prevail business challenges which has become increasingly common than ever before. These companies aim to improve processes and identify efficiencies as the manufacturing industry trends will be largely driven by technological advances, marketplace needs and the objectives of the business.
The manufacturing industry must constantly adapt to new economic conditions, new technologies and whatever challenges the world can throw at it. The COVID-19 pandemic presented one of the greatest challenges the industry has faced in some time. It also presented opportunities to change and grow. The manufacturing trends of 2023 are, in part, an ongoing response to the pandemic’s economic and social impacts. Advances in various forms of technology are also shaping 2023’s trends, as areas like artificial intelligence (AI) and “smart” devices continue to advance.
In many ways, the manufacturing trends of 2023 are a response to the unique challenges of the past few years, from business agility to worker safety, and the reality of adoption of current day’s “normal”. The ever changing technology and the demand for connectivity and automation enhancements are poised to continue solving problems and presenting unprecedented opportunities as well. Finally, they reflect larger worldwide trends that emphasize sustainability. Read on to learn more about nine of this year’s biggest manufacturing industry trends.
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1. Consolidating and Downsizing
The economic impacts of the pandemic, followed by worldwide inflation and other fiscal pressures, have led many manufacturing companies to look for ways to improve efficiency. Consolidation is one way that businesses can manage rising research and development costs and remain competitive. Companies may merge with one another, or large private equity firms may acquire smaller manufacturing operations in order to expand their capabilities and the value they can offer to customers.
Meeting increased demand with labor shortages are another issue that many manufacturing firms must face. If demand for a company’s goods outpaces its workforce’s capacity, the company may need to produce more by improving efficiency rather than expanding operations. Because the demand of manufactured goods continuing to increase, manufacturers are leaving money on the table if they do not have the capability to increase their production capacity and throughput to fulfill these needs. This requires a top-to-bottom appraisement of all manufacturing processes, identifying ways to increase production efficiency and support the workforce while also bridging the skills gap and providing cutting-edge technical training to meet today’s needs.
Historically always has been a primary concern, employee safety was neglected and is not often viewed as a “trend” so much as something that should be observed and fostered on a normal basis. Maintaining a safe workplace is important for any kind of business. The pandemic demonstrated that protecting workers’ health and safety is important not only for business success but also for the good of society as a whole. COVID-19 served as a reminder that workplace safety can have effects far beyond the workplace itself. At least some of the measures adopted during the pandemic are likely to continue in 2023 and beyond.
Another effect of the pandemic was the disruption of global supply chains. In 2020, public quarantine and stay-at-home orders caused turmoil as many businesses either shut down or scaled back their operations. The end of the pandemic’s worst effects brought renewed consumer demand and inflation, which created further chaos. Manufacturing businesses have been exploring new ways to track materials and inventory, identify potential disruptions and maximize efficiency to the greatest extent possible.
“Reshoring” is the opposite of “offshoring.” It refers to the process of bringing manufacturing processes back to a company’s home country. This has been a major trend in the industry over the past few years. Supply chain disruptions due to factors like COVID-19 and the war in Ukraine are major drivers of this trend, along with declines in manufacturing activity in China. According to Bank of America, the number of mentions of reshoring in S&P 500 earnings calls transcripts during the first quarter of 2023 increased by 128% over the same quarter in 2022.
Manufacturers do not necessarily have to rely on distributors and retailers to market and sell their products anymore. E-commerce technology has enabled manufacturers to deal directly with consumers, leading many firms to place more emphasis on B2C instead of B2B. This trend is almost certain to continue, especially now that many more people are accustomed to buying goods online.
Many industries are placing greater focus on environmental, social and governance (ESG) issues. An increase in the popularity of ESG investing is partly driving this trend. ESG investors look beyond factors like a company’s profitability when making investment decisions. They also want to see that a company is considering the broader impacts of its activities and working to reduce or mitigate any harm. Sustainability, carbon neutrality and other processes that minimize environmental damage are becoming increasingly common.
3D printing technology has improved and exceeded expectations in recent years by becoming far more accurate, flexible and most importantly cost-effective than ever before. This is expected to have some significant ramifications on the industry in the coming year and well into the future. Recent advances in 3D printing have made it fast and cost-effective for numerous aspects of the manufacturing process. Companies can produce prototypes much more quickly with a 3D printer, and they can experiment with customizations in existing products. Equipment maintenance may become much easier with 3D-printed replacement parts.
New equipment often comes with “smart technology” features that allow firms to monitor their activities in real-time via Wi-Fi or 5G networks. Companies can install sensors on existing equipment that perform the same functions at reasonably low costs. These technologies can allow managers to track equipment performance and identify maintenance needs. They can also track inventory and provide comprehensive data on a facility’s efficiency and productivity.
AI is one of several virtual technologies that are guiding the manufacturing industry through difficult times. While AI can perform functions like complex data analysis, augmented reality (AR) and virtual reality (VR) technologies can enhance performance and efficiency in areas like training, supervision and quality assurance.
The past few years have been a whirlwind of chaos and change. Making sense of how manufacturing businesses can adapt to current economic conditions and take advantage of new opportunities can seem overwhelming. Industry experts can help business leaders find the best ways to move their companies forward.
Want to learn more updates for the manufacturing industry? Check out 10 manufacturing incentives in the Inflation Reduction Act everyone in M&D should know.
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